The Cement Manufacturers' Association
has agreed to cut cement prices by 5 per cent for Central government projects.
This was communicated during a meeting between the commerce ministry and CMA, on
15 May 2006.
The issue of rising cement prices has
irked builders who have been complaining of abnormal growth in prices over the
past six months. The Builders Association of India has stated that cement prices
have risen by over 50 per cent since November 2005; the spurt being more
prominent in northern and western India.
CMA has maintained that prices were
being increased under pressure from rising input costs like coal, electricity
and freight.
Even as the CMA has agreed to this 5
per cent price cut to Central government projects, there is no mention of any
change to other buyer categories. CMA has also agreed that its members would
ensure adequate production and supplies to retailers.
It may be recalled that the Union
Commerce & Industry ministry had issued an ultimatum to cement manufacturers to
come up with a proposal to check rising prices. This is probably the first time
since the decontrol of cement that government has intervened in the area of
cement prices. It may be recalled that the Union government had intervened
similarly in 2003 regarding steel prices.